City agrees on consultant for possible CCA launch

SOLANA BEACH — Council members took another step toward the possible formation of a Community Choice Aggregation program, voting 4-1, with Ginger Marshall opposed, at the Nov. 16 meeting to negotiate a contract for consulting services.

“I think that all of us have some questions and the only way we’re going to get them answered is by moving forward with this,” Councilwoman Lesa Heebner said. “I think that we have two good companies that staff has identified … and I like the way that we’ll be negotiating with them.”

Since 2011 Solana Beach has been discussing CCA, which allows cities, either on their own or as part of a group or agency such as a joint powers authority, to supply renewable electricity within their jurisdiction.

The city wouldn’t own power poles or utility lines, nor would it delivery the energy. That would all remain the responsibility of San Diego Gas & Electric.

CCAs, which buy and build clean-energy supplies, are considered an effective way to reach greenhouse gas emission reductions mandated by the state.

Solana Beach received three responses to a request for proposals issued earlier this year. With advice from two outside industry experts, staff reviewed and ranked the bids and narrowed the choice to two.

Council authorized the city manager to begin negotiating with The Energy Authority/Noble Energy Solutions.

TEA is a not-for-profit power marketing corporation owned by eight municipal and state-chartered utilities. It was founded in 1997 and currently manages more than 30,000 megawatts of electric generation for 50 community-owned electric utilities.

Its subcontractor, San Diego-based Noble, is one of the largest electric services providers in California by volume and currently provides data management services for the five operating CCAs in the state.

If an agreement can’t be reached City Manager Greg Wade can switch and start negotiating with Pilot Power Group/EDMS. The San Diego-based companies have a combined 28 years of experience providing energy supply and management services and data management solutions.

Although the review panel deemed both teams “highly qualified,” TEA/Noble is the preferred choice because it has more direct experience with CCA formation, Dan King, the assistant city manager, said.

“We’ve got solid experts that are advising us,” Councilman Peter Zahn said. “We’re not rushing into this. We’re going to take it in phases.

“As we are negotiating … staff can choose to withdraw from negotiations any time and switch from one group to the other group,” he added. “Staff isn’t feeling wedded to one particular one … to get the best possible arrangements for our city and our residents.”

The creation of a potential CCA will be conducted in three phases. The first is development, which is expected to take about six months.

It includes community and local government outreach and a feasibility study that will be in addition to one already conducted that concluded CCA is viable in Solana Beach, despite its small size, city officials said.

If after phase one the city “is not comfortable moving forward the relationship can be severed with no cost to the city,” King said.

Phase two is the program launch, which could take up to a year. The final phase includes developing an operation budget and staffing.

But none of that will occur until an agreement is reached with the consulting team and then approved by council members.

The move to begin negotiations doesn’t commit the city to launch a CCA, nor does it guarantee a contract for the services, King added.

If a contract is approved the consultants will work with staff to develop an implementation plan and analyze risk and load data.

As part of phase two an implementation plan must be submitted to the Public Utilities Commission. During that time no less than four notifications must be sent to ratepayers to advise them a CCA is being launched.

There is an opportunity to opt out at any one of those points. Wade said he would recommend increasing the number of notifications to five or six.

“I’m not seeing how that’s not choice,” Zahn said in response to concerns raised by residents.

Wade said ratepayers can also opt out after the launch.

Based on her questions, Marshall has concerns about the potential future costs to ratepayers and the city.

Council members said many of those concerns will be addressed during phase one.

“All we’re going to do is get a lot of good information,” Councilman Mike Nichols said. “We’re going to have all that public outreach that everybody wants to have, answer all these tough questions that people are asking and hear from the experts on how to proceed.”